Where the Action Is in Manhattan Housing

Jonathan Miller, president and CEO of Miller Samuel, showed up to a panel at the 92nd Street Y wearing a $39 suit. Except it had been marked down from $800, and it did double duty Thursday night as an explanatory device for the state of the Manhattan residential real estate market.

The message? It’s all about value: Things are terrible, but also kind of great, with a universe of possibilities out there for someone in a position to buy.

“New Yorkers are bargain hunters,” said fellow panelist Pam Liebman, president and CEO of the Corcoran Group, who cited John Jacob Astor’s regret that he hadn’t bought every inch of Manhattan when he could. “Never fail to take advantage of a good crisis.”

The fifth annual high-level real estate panel, moderated by former Douglas Elliman president Paul Purcell, crystallized what has happened in the market over the last six months and had some recommendations for a half-full crowd of elderly landlord types, which—as determined by a show of hands—had more buyers than sellers in attendance.

The panelists came with a barrage of numbers. Transactions are down by half. Inventory is up 38 percent from this time last year. Homes are selling for 20 below asking price, on average, and spending 142 days on the market. Credit is seriously hard to come by, but if you can wrangle financing, now might be the best time to buy in years—and people are getting the message.

Alan Rosenbaum, head of the mortgage brokerage GuardHill Financial, was perhaps the most upbeat on the stage. He’s doing a brisk business in refinancing houses as well as helping people find loans when they’ve been turned down by the big banks, and he said he sees the tide beginning to turn. “Things are starting to come around. There’s great opportunity,” he said. “The purchase market is starting to come back.”

Of course, the activity isn’t in the mega-listings, which spend months on the market. Most of the action is in deals under $2 million, said Ms. Liebman, who is shifting her firm’s marketing strategy to focus on value and encouraging her brokers to aim low. “Do the kids, do the grandkids of the people you’ve been dealing with,” she said. Heck, do rentals for a while.

The real problem, Mr. Rosenbaum said, is “public psychology”—the doom-and-gloom media reports that have people thinking the market has further to fall. Ms. Liebman agreed, calling out specifically a Times article from last week about the rising frequency of auctions, which she said contributed to the “fear factor.”’

Of course, buildings will get auctioned. But, Ms. Liebman said, those are the ritzy condo projects that maybe “shouldn’t have gotten built in the first place.” Without naming names, she called out buildings in the financial district with hundreds of units that are now going begging.

“They were marketed on sex appeal, rather than the bread and butter,” she said. “We can talk about pet spas and wine bars, but at the end of the day, do you have a good floor plan? Do you have a good price?”

Mr. Miller struck perhaps the most sobering note of the night, emphasizing that although affordability was at an all-time high, success in a sale all comes down to credit—which could still take one or two years to loosen up.

What won’t help, Ms. Liebman said bluntly, are tax increases that hit the higher-earning New Yorkers, who could easily pick up and move to Connecticut.

“There’s a big movement in the real estate industry not to be supportive of these increases in taxes,” she said. The others nodded in agreement.